Despite 2020 being a year where, at times, it seemed like the UK was closed for business, 676,500 mortgage deals were still taken up for property purchases, and 1,681,600 remortgages (or product transfers) were processed.
(Source: UK Finance, Household Finance Review, March 2021)
The pandemic also threw up different ways of doing business, and for some clients, Zoom and Teams video meetings may be their preferred way forward.
Whilst there are still numerous bottle-necks in the mortgage application process for us to navigate, some of those processes have been improved by better use of technology across the board, which again should pay dividends in the future.
Although many have suffered financially, a sizeable number would have become unwitting savers (through no work travel, no restaurants, no overseas holidays, etc), which could be used for a deposit or to help reduce the amount of loan borrowed.
Don’t sit on an SVR
One key piece of advice – unless there are mitigating circumstances – is not to remain on your lender’s Standard Variable Rate (SVR) once you come to the end of your deal period. As the following shows, your monthly payments could be substantially more!
Yet, despite those larger payments, at least 1.2m residential mortgage borrowers, and possibly as many as 2m, are still on an SVR.*
2-year Average Fixed Rate = 2.57%
5-year Average Fixed Rate = 2.75%
Standard Variable Rate (SVR) = 4.41% **
And, whilst rates are creeping up, do consider that these are the average rates. You might be able to secure deals that are around 1%-1.5% less. However, the best rates are for those that, for example, require a Loan-to-Value of 60% of less, and are remortgaging.**
(Sources: *UK Finance, June 2020 statistics; **Moneyfacts, 26 February 2021)
Stamp Duty
Currently, with no stamp duty being paid on residential purchases up to £500,000, that means there’s a potential maximum saving of £15,000. In Q4 2020, 92% of all first-time buyers didn’t pay any stamp duty, nor did 76% of homemovers. With the extension to June 2021 for the £500,000 threshold, and then up to £250,000 until September, it might be something to consider.
Additional hand-holding
Whatever your situation is, we’ll take a view of the wider marketplace rather than just what’s on offer from one high street lender.
We will also endeavour to reduce the hassle of filling out forms and applications.
Plus, we can discuss the type of Insurance Protection that would be affordable and a suitable choice for your needs and circumstances. Ideally, to protect both your mortgage debt and your income stream(s).
Irrespective of whether you are new to property buying and protection insurance cover, or an old hand, do get in touch to see how we can help.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
